Exact Sciences Corp Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Catherine Schulte - Robert W. Baird - Analyst : Hey guys, thanks for the questions. Maybe first just starting on the screening guidance, you're calling for 13% growth for the full year, some acceleration throughout the year is implied there. So maybe just talk about the build, what growth drivers get you excited as you get into the back half. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 10:00PM, EXAS.OQ - Q4 2024 Exact Sciences Corp Earnings Call And then if we look back to your 2027 outlook that you laid out at your investor day, it would also take some acceleration over the next few years to hit that target. So maybe just talk through your confidence there and some of the opportunities that might drive that acceleration. Thanks.

Question: Doug Schenkel - Wolf Research - Analyst : Okay, thank you for that. Good afternoon, everybody. Thanks for taking my questions and congrats to both Derek and Eric. Two questions, and then I'll get out of the way. The first is on your press release and in your prepared remarks, you talked about 2025 possibly being the most productive year in the history of the company. Can you just unpack that a little bit and just define what you mean by that as you think about balancing the launch of a record number of products in a single year, the goal of driving robust Cologuard revenue growth and volume growth and also demonstrating that you can do all of those REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 10:00PM, EXAS.OQ - Q4 2024 Exact Sciences Corp Earnings Call things while growing SG&A at a rate that is meaningfully below sales, essentially giving us more operating leverage. I just want to see how you're balancing those three big things as you talk about the most productive year in the history of the company. And then the second question is just a guidance question. In terms of MCED and MRD contributions in guidance, how are you thinking about those, essentially what's in guidance for both of those numbers at the revenue line. Thank you.

Question: Tycho Peterson - Jefferies - Analyst : Hey, thanks. I want to maybe probe a little bit on the margin outlook because you are guiding a little bit below the Street and EBITDA. So can you -- is the spending on sales and marketing going to be a little bit higher than you previously telegraphed? And are you able to cut deeper on G&A? Is that kind of the takeaway here? And maybe Aaron, can you talk about whether these are programs that are in flight at this point on G&A? And then a follow up on blood. I just want to make sure the blood assay is locked down. It seems like there's still some debate on whether the assay is locked down. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 10:00PM, EXAS.OQ - Q4 2024 Exact Sciences Corp Earnings Call

Question: Matt Sykes - Goldman Sachs - Analyst : Hi, thanks for taking my question. Maybe just along the lines of the commercial team for this year, given the number of new launches you've got and just given some of the challenges you had in Q3 of last year. Can maybe just talk a little bit maybe some changes you made post that, what were some of the new focus for the sales team going into this year based on some of the lack of acceleration we saw from Q3 to Q4 last year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 10:00PM, EXAS.OQ - Q4 2024 Exact Sciences Corp Earnings Call

Question: Dan Brennan - TD Cowen - Analyst : Great. Thank you. Thank you for the questions. Congrats. Just on Cologuard Plus, Kevin, I'm just wondering you're baking in a price benefit given the higher price, but I'm wondering if you're baking any volume left. It is a materially better test. So you guys are always surveying doctors. I'm just wondering kind of what you're hearing from the field and is there a chance that you could see conversion of some of the docs that have sit on the sidelines for the Cologuard? And then, just kind of relate more broadly to Cologuard if you would. I guess we'll hear from tomorrow night, but I'm just wondering, it's obviously very early in the blood launch, but any color from the field that you're hearing on the profile of Cologuard as it compares to the shield test as it's early in its launch. Thanks.

Question: Jack Meehan - Nephron Research LLC - Analyst : Good afternoon. It will be my honor to follow up on Tycho's question and just ask the status of getting the colon blood test locked down and the leg of the blue seat. Thanks.

Question: Andrew Brackmann - William Blair & Company LLC - Analyst : Good afternoon. Thanks for taking the questions. And Derek, looking forward to working with you and Eric, I'm sure you're listening, congrats again. Maybe on Cologuard Plus, can you maybe just talk about some of the progress you've made on the reimbursement front with commercial payers? What's been their receptivity to sort of this higher price and also any change in tone from then just in light of the upcoming Braidwood case heading to the Supreme Court? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 10:00PM, EXAS.OQ - Q4 2024 Exact Sciences Corp Earnings Call

Question: Patrick Donnelly - Citi - Analyst : Hey, guys. Thanks for taking the questions. Kevin, maybe another one on the pipeline side. I know you said, maybe some of the tests aren't material this year. Can you just talk about, I guess, the pathway here on onco-detect, the MRD side, Cancerguard (inaudible) and then the unnamed blood CRC, which of those do you feel like become material first? What does that trajectory look like? Just curious how you think about the past for the three of them and just the contribution on the revenue side as we look out over the next few years.

Question: Vijay Kumar - Evercore ISI - Analyst : Hi, guys. Thanks for taking my question. Kevin, maybe on the last question around on MRD. Your comments here on this being perhaps a more near-term opportunity. We had the data from Alpha-CORRECT. I think there was some confusion on the data, the algorithm which was used. Could you remind us on what algorithm is being used in the beta correct, timing of when we can see the data for Beta-CORRECT and based on those results, like how should we think about the revenue ramp. I think you've submitted to more [DX]. How critical is that reimbursement? What percentage of population is that covered and how do you compete against your largest competitor in that space?

Question: Subbu Nambi - Guggenheim Securities, LLC - Analyst : Hey, guys. Thank you for taking my question. Can I ask the follow up to Vijay's question? Is the test performance expected to be consistent with what you were presented at ASCO GI? Or can it be better a few percent points either on the sensitivity or specificity?

Question: Puneet Souda - Leerink Partners LLC - Analyst : So a simple one for me on pricing. Why shouldn't we see more than 2 points of lift from Cologuard Plus pricing and what are the levers and pieces that you think that can potentially drive that higher versus what you provided and wondering if you can give a pricing assumption from Cancerguard. Thank you.

Question: Dan Leonard - UBS Securities LLC - Analyst : Thank you. I have a question on your screening guidance for 2025, that 13% growth at the midpoint. I thought a few months ago you were messaging that 15% would be a floor given Cologuard Plus pricing re-screens, et cetera. I was hoping you could comment on that variance, and I'd love to learn more about what's changed in your thinking over the past three months.

Question: Dan Leonard - UBS Securities LLC - Analyst : I think it was that analyst after party, you have post the earnings call.

Question: Bill Bonello - Craig-Hallum Capital Group - Analyst : Hey, guys. Thanks for taking the call and welcome Derek. So just given your comments that you're seeing actually improvement in the rate of re-screen, and we see a big uptick to the 2 million people eligible, my sort of back of the envelope maths, it seems like the implicit expectation on people screened for the first time is that population is maybe growing in the low to mid single-digits. Is that consistent with how you're thinking about the numbers?

Question: Sung Ji Nam - Scotiabank - Analyst : Hi. Thanks for taking the question. One on Cancerguard as well. Without having third party reimbursement when you launch, just could you elaborate a little bit more in terms of your go to market strategy there? You mentioned leveraging your existing sales force, but was curious kind of where do you expect to see the biggest traction in terms of the different channels that you have there. Thank you.

Question: Eve Burstein - Bernstein - Analyst : Thanks so much for the question. I actually want to follow up on Andrew's question about Braidwood. And so my interpretation here is that if the court case is upheld when it's heard by the Supreme Court recommendations from the USPSTF after March of 2010 no longer need to be covered without any cost sharing. So that means both Cologuard and any future blood tests would no longer need to be covered by private payers without that patient cost sharing. Is that correct? If so, how quickly could the no cost sharing be revoked by payers? Like I imagine there are regulatory filings that don't allow for this sort of change without some kind of warning. And then that's a pretty big hit to exact business. How are you preparing or planning if the Supreme Court does uphold that appeal?

Question: Andrew Cooper - Raymond James & Associates, Inc. - Analyst : Hey everybody. Thanks for the question here. A lot already asked. So maybe a little bit on precision oncology. If you think about the guide and we strip out, assuming you did have call it that [$10 million] or so Nexus transition head headwind to close the year, it's a little bit slower. You should have a little bit of -- at least a little bit of Oncodetect dropping in. So maybe talk us through what the assumptions are there and why that can't grow a little bit faster and then related. I think Aaron, in a previous answer you called out sales and marketing, some investments behind Oncodetect. In the past we've talked about that more as another arrow in the quiver for the Oncotype DX Salesforce. So maybe what's changed or where does that incremental spend need to go to support Oncodetect in terms of the commercial team. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 10:00PM, EXAS.OQ - Q4 2024 Exact Sciences Corp Earnings Call

Question: Kyle Mixon - Canaccord Genuity - Analyst : Hey guys, thanks for the questions, Kevin and Aaron, just to talk about the care gap revenue contribution '25 versus '24 in terms of dollars and the year of your growth rate implied and relatedly, any update on any business shifting from standard primary care Cologuard ordering to care gap.